Labour Party leader Phil Goff says raising the age of entitlement for superannuation to 67 is essential because the number of people in retirement in the next 40 years will more than double.
Under the party's policy announced on Thursday, the age of entitlement would rise gradually, starting in 2020 and hitting age 67 by 2033, affecting more than 2 million people of working age.
A transitional payment at the same rate as superannuation would be available to people who could not continue to work past 65.
Mr Goff told Radio New Zealand's Morning Report programme that New Zealand's recent credit downgrades by international ratings agencies were due to too much debt and an ageing population while the country has no plans to deal with that challenge.
"Nobody's actually had the guts to do it. We're saying this is about not loading the debt on our kids, this is about growing our economy. We know unless we increase our savings we're going nowhere."
Mr Goff says by 2033, half of New Zealanders between the age of 65 and 69 will still be working.
He says the money needed to fund retirement through savings scheme KiwiSaver will come out of negotiated wage agreements, increased profitability and raised productivity.
Meanwhile, the ACT Party would like to see a gradual raising of the age to 67 in about five years. Spokesperson Stephen Whittington says National's insistence on maintaining the status quo is just delaying the inevitable.
No rethink by National
National Party leader John Key says Labour's plan to raise the superannuation age will not force his party to rethink its stance.
Mr Key has staked his political career on maintaining both the age of eligibility from 65 and the current entitlements.
Labour says it is time to make some hard decisions, so future generations are not burdened with the cost. It says raising the age to 67 would save the Government $100 billion over 20 years, from 2030.
But Mr Key says this is just a panicked policy response, as Labour realises it needs to raise money in order to pay for its other election promises.
Policy no solution to ailing economy - Peters
New Zealand First leader Winston Peters says lifting the retirement age is not a solution to the ailing economy.
Mr Peters has long supported a compulsory retirement scheme, but says there is no need to raise the superannuation age.
He told Radio New Zealand's Morning Report programme on Friday that people who have planned for retirement for years now face a change in the rules, but Labour's policy will not solve the economic woes faced by the Government at present.
"The age of entitlement decision by Labour that is set some time in the dim future has no effect on today's economy - and that economy's in crisis. We need solutions that work now."
Mr Peters says his party backed a compulsory superannuation scheme to build national savings and protect New Zealand's economic sovereignty, but that was rejected.